The International Accounting Standards Board (IASB) publishes for public comment an Exposure Draft of proposed amendments to IAS 19 Employee Benefits.
The IASB is responding to concerns that were raised about the complexity of applying certain requirements of IAS 19. Specifically the concerns related to the accounting for contributions from employees and third parties to defined benefit plans.
The objective of the proposed amendments is to provide a more straight-forward alternative for this accounting when the contributions payable in a particular period are linked solely to the employee’s service rendered in that period.
The proposed guidance would be applicable, for example, to accounting for employee contributions that are calculated according to a fixed percentage of salary.
The issue originated from a submission to the IFRS Interpretations Committee, which recommended that the IASB amend the standard.